FAR Limited Navigates Strong Senegal Production Amid $6M Woodside Claim

Strong Production Performance at Sangomar

FAR Limited’s latest quarterly report highlights exceptional production results from the Sangomar field offshore Senegal, operated by Woodside Energy. The field maintained a production plateau of 101,000 barrels per day (100% basis) with near-perfect reliability of 99.6% during the quarter ended June 2025. This steady output underscores the operational success of the project, although production is expected to decline starting in the third quarter of 2025.

Contingent Payment Boosts Cash Position

Reflecting the strong production, FAR received a provisional contingent payment of US$11.5 million for calendar year 2024. This payment is part of a contingent consideration arrangement tied to FAR’s previous 13.67% interest in the RSSD Project, now owned by Woodside. The payment depends on oil prices exceeding a threshold and is subject to reconciliation with joint venture partners and the Senegalese government, meaning the final amount could adjust.

Legal Dispute with Woodside Energy

Despite positive operational news, FAR faces a significant indemnity claim from Woodside Energy totaling just over US$6 million. This claim relates to disputed petroleum expenditures under the Sale and Purchase Agreement from the 2021 sale of FAR’s RSSD Project interest. The matter remains under negotiation, introducing an element of uncertainty that investors will watch closely.

Shareholder Returns and Tax Clarity

In corporate developments, FAR completed an 8 cents per share capital return in June 2025, returning approximately A$7.4 million to shareholders. The Australian Taxation Office has since issued a Class Ruling confirming the return is not assessable as a dividend, providing clarity and potential tax benefits for shareholders.

Financial Position and Outlook

FAR ended the quarter with a healthy cash balance of US$8.2 million and minimal expenditure, primarily on corporate administration. The company’s financial discipline, combined with contingent payments and ongoing production, positions it well for the near term. However, the resolution of Woodside’s indemnity claim and the anticipated production decline at Sangomar will be critical factors shaping FAR’s future trajectory.